Revisiting the role of the environment in the capabilities – Performance relationship : A meta-analysis

Research Seminars
Academic Areas Strategy
Amit Karna , European Business School, Germany
March 6, 2013 | Wednesday
AC2MLT, hyderabad, Hyderabad, India
For ISB Community

Extant literature has emphasized the importance of dynamic (as compared to ordinary) capabilities for achieving and maintaining competitive advantage in dynamic environments. However, empirical research has left open the question under which environmental conditions investments in ordinary and dynamic capabilities benefit firm performance. We undertake a meta-analysis of 63 empirical studies investigating the capabilities–firm performance relationship under different environmental conditions. The results suggest that ordinary capabilities in both relatively stable and changing environments are positively and more strongly associated with performance than is the case with dynamic capabilities. When comparing the moderating effects of environmental dynamism from an industry versus a country perspective, we find mixed results. We advance theory by highlighting the importance of the environment with respect to the capabilities–performance relationship.

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